By Andrew Moran

The number of Americans collecting unemployment benefits has slipped to its lowest point in 10 months, the Department of Labor reported on Dec. 11.

For the week ending Nov. 29, continuing jobless claims declined by 99,000 to 1.838 million—the lowest reading since early April. This is down from the previous week’s downwardly revised 1.937 million.

Market watchers had penciled in a reading of 1.95 million.

Economists have closely examined this measure to assess the challenges that out-of-work individuals face in finding new employment.

The long-term unemployment rate—individuals jobless for 27 weeks or longer as a percent of total unemployed—has remained elevated at 23.6 percent.

Demand for labor has softened recently, with job openings stalling at 7.67 million in October as employers take a wait-and-see approach before restarting their hiring efforts.

The common refrain of a “low hire, low fire” environment has led employees to be more cautious before submitting their resignation letters, with fewer workers stepping down from their positions.

Job quits declined to 2.941 million in October, the lowest level since August 2020. Additionally, the quits rate—a gauge of the share of workers who voluntarily leave their jobs—slipped to 1.8 percent.

Echoing Federal Reserve Chair Jerome Powell’s description of a “curious kind of balance,” Indeed hiring lab economist Cory Stahle said today’s labor market is “stuck.”

“For now, things are steady. However, it feels like sooner or later, something will need to break—hiring will need to pick up, or layoffs will continue to rise,” he said in a Dec. 9 note.

Meanwhile, volatility is being seen in the number of Americans filing for first-time unemployment benefits.

Initial claims rose 44,000 to 236,000 in the week ending Dec. 6, reversing four weeks of declines. The prior week’s figure was revised up to 192,000, which was the lowest level of claims in more than three years.

The four-week average, which strips out week-to-week volatility, ticked up to 216,750 from 214,750 in the previous week.

An initial claims program for federal workers registered further easing, declining by 483, to 643.

Over the past year, economic observers have been monitoring this metric to gauge the impact of the current administration on government payrolls.

A Cool Breeze in the Labor Market

Monetary policymakers have acknowledged that the U.S. labor market is cooling.

In its post-meeting statement on Dec. 10, the Fed deleted the term “low” when describing the unemployment rate, which sits at 4.4 percent.

Still, the Summary of Economic Projections—a quarterly survey of Fed officials’ expectations for policy and the broader economy—suggests the central bank is not anticipating a collapse in employment conditions. The Fed forecasts the jobless rate to slow to 4.4 percent in 2026 and 4.2 percent in 2027, with stronger GDP growth in the year ahead.

Federal Reserve Chair Jerome Powell leaves after speaking at a news conference following the Federal Open Market Committee (FOMC) meeting in Washington on Oct. 29, 2025. Madalina Kilroy/The Epoch Times

Despite a third consecutive quarter-point rate cut at the final meeting of 2025, the Fed expects to lower interest rates only one time in 2026.

While there will be an influx of employment and inflation data ahead of the January policy meeting, Powell said the institution will use a “skeptical” eye to assess the figures.

“We’re going to get data, but we’re going to have to look at it carefully and with a somewhat skeptical eye,” Powell told reporters. “We will have a lot of the December data by the time of the January meeting. So we expect to see a lot more.”

The October and November jobs reports will be published on Dec. 16, and the November consumer price index report will be released on Dec. 18.

“Where do they see the risk to balancing their dual mandate—does it switch more to inflation from labor?” Jay Woods, chief market strategist at Freedom Capital Markets, said in a note emailed to The Epoch Times. “They see inflation easing to 2.5% next year, so that’s a positive. They referred to the job market and unemployment edging up, and did not refer to it as low.”

Assuming no new major tariff announcements, Powell believes inflation will peak in the first quarter, noting that higher import duties have caused inflation to “overshoot.”

The next two-day Fed meeting will take place on Jan. 27 and 28.